Pembina Pipeline is acquiring Inter Pipeline

In a deal described as creating one of the largest energy infrastructure companies in Canada – and that includes a major polypropylene (PP) resin plant – Pembina Pipeline Corp. is acquiring Inter Pipeline Ltd.

The deal between the two Canadian energy firms is valued at $15.2 billion, officials with Pembina said in a June 1 news release.

Both firms are based in Calgary, Alta.

Pembina and Inter Pipeline shareholders are expected to own 72 per cent and 28 per cent of the combined company, respectively. The combined entity will continue to be led by Pembina’s senior executive team. Representation from Inter Pipeline on Pembina’s board of directors will be determined prior to closing of the transaction, which is expected in the fourth quarter of 2021.

The deal includes the Inter Pipeline’s Heartland Petrochemical Complex (HPC), which is currently being built in Strathcona County, Alta. The HPC is designed to convert locally sourced, low-cost propane into 525,000 tonnes per year of PP when production begins, which is expected in early 2022.

“After a comprehensive review of strategic alternatives…it was evident that a combination with Pembina offered compelling value for Inter Pipeline shareholders in the short-term, as well as the opportunity to participate in the upside of HPC and the combined business longer-term,” Margaret McKenzie, Inter Pipeline’s Chair of the Board of Directors, said in the news release. “The creation of a more highly integrated business across the energy infrastructure value chain results in a combined entity that is greater than the sum of its parts. The combined asset suite, financial strength, and operational foundation, makes us highly confident that the transaction will translate into significant value for all stakeholders, both immediately and into the future.”